At Steinberg's Friday arraignment, Barry Berke asked U.S. District Judge Richard Sullivan to step aside and allow the case to be randomly assigned to a new judge. Berke alleged that Sullivan was too easy on prosecutors in a past insider-trading case compared to two other judges on the Manhattan federal bench.

Sullivan was assigned the case because it is related to that against Level Global Investors co-founder Anthony Chiasson and former Diamondback Capital Management portfolio manager Todd Newman, whose trial he oversaw last year. The two were indicted alongside Steinberg's former analyst, Jon Horvath, who is cooperating with prosecutors, and are listed as co-conspirators in the case against Steinberg.

Chiasson and Newman were convicted in December.

Berke noted that Sullivan did not require prosecutors to show that Chiasson and Newman knew about the personal benefits their tippers received, as his colleagues Jed Rakoff and Richard Holwell did in other cases. Berke called it a "significant legal issue."

Sullivan said he would "consider" Berke's request, but assured Steinberg that even if he rejected it, he would be an impartial arbiter.

"Don't believe Mr. Berke, I'm not as bad as he says," Sullivan said. "If you get stuck with me, it could be worse."

According to Reuters, from Steinberg's perspective, he might be as bad: Court records show Sullivan has handed down harsher sentences than his colleagues in insider-trading cases.

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The ratio calendar combination spread couples two ratio calendar spreads, one using calls and the other using puts. The call strike prices are higher than the put strike prices. This strategy is complex and profit is limited, but if a high amount of time value is involved in the short positions, that profit can be substantial and risk is still limited.